Retirement
Pension saving plummets ahead of Automatic Enrolement launch
A Department for Work and Pensions (DWP) study said the number of workers enrolled in a work-based scheme was down from 31% in 2007 to 26% today.
And only 31% of private sector organisations currently offer any pension provision for their staff. This is down from 41% in 2007.
Pensions minister Steve Webb said the introduction of auto-enrolment would reverse the slump.
Webb said: “Automatic enrolment into workplace pensions will start the monumental shift we need to get millions more people in Britain saving for their retirement.
“It’s a major change for business too, especially for firms that don’t currently offer pension schemes for staff and it is good news that so many say they will use NEST.”
Some 45% polled said they would use the National Employment Savings Trust and 11% said they would set up their own scheme.
Most firms who already offer some form of workplace provision plan to keep all current members of their largest or only scheme in their existing scheme (60%). Some 6% plan to enrol all current members in to NEST.
While more than half of bosses said they would maintain current contribution levels, 6% admitted they would reduce the amount paid into employees’ pensions.
Under auto-enrolment the worker contributes a minimum of 4% of qualifying earnings, their employer 3% and the government gives 1% tax relief.
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